Shopping centre giant Westfield has confirmed a lift in profit over the past 12 months, with Westfield Sydney revealed as one of the brightest stars in the company's vast global portfolio.
The group, responsible for 105 shopping centres across five countries, achieved a $1.72 billion profit in the year to December 31, 2012 – up 18.3 per cent from $1.532 billion in 2011.
Funds from operations (FFO) came in at $1.47 billion, representing 65.0 cents per security, up 0.3 per cent on the prior year.
Earnings before interest and tax was $2.12 billion, up three per cent on the prior year. Return on contributed equity was 11.4 per cent for the year.
Net property income was $2.02 billion, in line with the previous year and up seven per cent adjusted for divestments.
Commenting on the positive results, Westfield Group co-CEOs, Peter Lowy and Steven Lowy said it has been a “significant year” for the group.
“The performance for the year has been very good and in line with expectations.
“Our strategy is to develop and own superior retail destinations in major cities by integrating food, fashion, leisure and entertainment using technology to better connect retailers with consumers. We aim to operate our centres at the highest standards and efficiency to create assets that are highly productive, have strong franchise value and have the ability to attract the world’s leading retail brands.”
The pair also acknowledged notable developments for the group throughout the year, which included $300 million of acquisitions and $800 million invested in development activities.
In addition, over $1.4 billion of new projects commenced in 2012, including Westfield World Trade Center retail development in New York.
The year also saw the completion of the group's $1.2 billion development of Westfield Sydney, which the company has revealed as the centre which generates “the highest specialty sales productivity across Westfield Group's global portfolio”.
Comparable specialty retail sales across the group's retail portfolio saw the United States up 6.3 per cent, up 0.5 per cent in Australia, up 0.1 per cent in New Zealand and up 12.8 per cent in Brazil for the 12 month period.
“In Australia, whilst retail conditions have been subdued for most of the year the business has performed well. Sales productivity of specialty stores remains high at $9,887 per square metre and we continue to see demand for space from both domestic and international retailers,” Steven Lowy said.
Going forward, the co-CEOs said the company will continue to expand on its existing portfolio.
“We have confidence in the group’s business model and opportunities for growth. We are focused on remaining at the forefront of our industry as we continue to improve the quality of our portfolio through our $12 billion development pipeline together with acquisition opportunities in existing and new markets. We also plan to continue redeploying capital from further joint ventures and non-core asset disposals.”